CSRS 4200 Compilation Engagements – Plainly Speaking

This document is intended to assist practitioners in understanding, at a high level, how the new CSRS 4200 – Compilation Engagements standard may impact the engagement that practitioners performs under Section 9200 where a “Notice to Reader” is issued.

This document is not a substitute for reading and understanding the entirety of either standard, as not all paragraphs of the standard, or application and other explanatory material in the respective standards, has been covered below. References in square brackets refer to the paragraphs in CSRS 4200 where the information is discussed in more detail. 

The abbreviation CFI is used to mean Compiled Financial Information.

CSRS 4200 Compilation Engagements

• This standard is effective for periods ending on or after December 14, 2021 [12]
• CSRS 4200 replaces Section 9200 and AuG-5
• CSRS 4200 does not apply when:
  • Contracted as a controller [2(b)]
  • Engaged to perform bookkeeping [2(c)]
  • CFI that is either:
    • presented solely in government-prescribed tax forms [2(d)(i)]
    • subject to an audit or review by another practitioner [2(d)(ii)]
• If the practitioner decides or is requested to issue a communication all requirements of the standard apply [3]
  • The only form of communication you can attach to the CFI is a compilation engagement report
  • No other form of communication, such as disclaimers, can be included or attached to CFI excluded from the scope of CSRS 4200
• The basis of accounting must be described in a note which is intended to assist users in understanding how the CFI is prepared [7]
  • Examples: a cash basis of accounting; a cash basis of accounting with selected accruals and accounting estimates; a basis of accounting prescribed by a contract or other form of agreement established by a creditor or a regulator
  • It is rare, though entirely possible, for the CFI to be prepared under a general-purpose framework, such as ASPE or ASNFPO. As such, reference to ASPE or ASNFPO in the basis of accounting should only be made if the CFI complies with all aspects of these frameworks, otherwise the CFI may be considered misleading
  • Full compliance with ASPE/ASNFPO would mean all recognition, measurement, presentation and disclosure requirements are met, such as inclusion of a cash flow statement and full note disclosure.
• Before performing the compilation engagement, the practitioner and client should agree on the terms of the engagement and record this in a new engagement letter that includes [24, 25]
  • Objective and scope [25(a)]
  • Intended use of the CFI including if the CFI is intended to be used by a third party [25(b)]
  • If the CFI is intended to be used by a third party, the acknowledgement of management that the third party [25(c)]
    • is in a position to request and obtain further information from the entity; or
    • has agreed the basis of accounting to be applied with management
  • Responsibility of the practitioner to comply with the entirety of the standard and relevant ethical requirements [25(d)]
  • The acknowledgement of management that [25(e)]
    • a compilation engagement is appropriate for the intended use
    • a compilation engagement is not an audit or review
    • the CFI should only be used by the third party referenced above
    • it is responsible for
      • the CFI
      • selecting the basis of accounting to be applied that is appropriate for the intended use
      • the accuracy and completeness of the information provided to the practitioner
      • attaching the compilation engagement report when distributing or reproducing the CFI
  • The expected form and content of the compilation engagement report [25(f)]
• Consider annually any changes in circumstances that would require a new engagement letter [26]
• Performing the engagement [27-33]
  • Obtain knowledge of business and operations, accounting system and accounting records, basis of accounting to be applied, accounting policies used
  • Comparative information in the CFI is not required, though is also not prohibited, as it is a matter of professional judgment
  • Notes in addition to the required basis of accounting note are not required, nor prohibited, but may be included if useful or necessary to prevent information from being misleading
  • There is no requirement to label the CFI as “unaudited”
  • Discuss with management significant judgments for which assistance has been provided
  • Read the CFI with respect to: knowledge of the entity; basis of accounting applied; consider if CFI appears misleading
    • If CFI appears misleading bring this to the attention of management and request additional or corrected information
    • If no additional or correct information is provided to resolve the misleading CFI, withdraw from the engagement and inform management why
  • Obtain acknowledgment of responsibility for the final version of the CFI
• Use the new compilation engagement report that includes all the required information [37]
• Date the report on the date of completion of the engagement, including obtaining management’s responsibility for the final version of the CFI [38]
• Documentation shall, at a minimum, include [39]
  • Engagement letter
  • Description of the business and operations, accounting system and accounting records, basis of accounting to be applied, accounting policies used
  • Reconciliation of the accounting records to the CFI, including adjusting entries or other amendments
  • Discussion with management of significant judgments for which assistance has been provided
  • Communication of CFI that appears misleading and how management has addressed these
    • If withdrawn from the engagement communication to management of the reasons for this withdrawal
  • Copy of the final version of CFI for which management has taken responsibility, and evidence of this acknowledgement
    • Examples: a signature on the final version of the CFI; a written communication; an oral acknowledgment documented in the working paper file
  • Copy of the compilation engagement report

Other Resources

KBASE COLLECTION – CSRS 4200 contains a list of resources that will assist you in getting ready for the new standard.